S-1687 : Still Just a Bill

The "Fair Accounting for Condominium Construction Act" (S. 1687) proposes amendments to the Internal Revenue Code of 1986, specifically concerning the accounting methods used for certain residential construction contracts.

• Key Changes:
  • It replaces the term "home construction contract" with "residential construction contract" in Section 460(e) of the Internal Revenue Code.
  • It modifies the exception to the percentage of completion method of accounting for certain residential construction contracts, including those that are not home construction contracts, by substituting '3-year' for '2-year' in the determination of whether a taxpayer meets the gross receipts test.
  • It removes the previous paragraph (4) of Section 460(e) and redesignates paragraph (5) as paragraph (4), adjusting references accordingly.
  • It revises Section 56(a)(3) of the Code to apply the exception for alternative minimum tax purposes to "any residential construction contract" as defined in the amended Section 460(e)(4).
• Purpose: To modify the accounting rules for residential construction contracts, potentially impacting how income is recognized for tax purposes.
• Effective Date: The changes would apply to contracts entered into after the enactment date of the Act.